Owners Insurance Co. v. Craig
2017 Mo. LEXIS 99
| Mo. | 2017Background
- Owners issued the Craigs an auto policy with a declarations page listing $250,000 per person UIM limits; the UIM endorsement contains a “Limit of Liability” clause disclaiming any duty to pay the full declarations amount.
- The UIM endorsement includes set-off language: Owners pays only the lesser of (1) declarations limit minus available liability limits of the at-fault driver, or (2) compensatory damages minus those liability limits.
- Vicki Craig suffered >$300,000 in bodily-injury damages; the at-fault driver’s insurer (Shelter) paid $50,000. Craigs demanded $250,000 from Owners; Owners paid $200,000 (deducting Shelter’s $50,000) and sued for declaratory relief over the remaining $50,000.
- The circuit court granted summary judgment for the Craigs, finding the policy ambiguous. Owners appealed; the case was transferred to the Missouri Supreme Court.
- The central dispute: whether the policy unambiguously permits Owners to set off the at-fault insurer’s payment against the UIM declared limit (so Owners need not ever pay the full $250,000).
Issues
| Issue | Plaintiff's Argument (Craigs) | Defendant's Argument (Owners) | Held |
|---|---|---|---|
| Whether the policy unambiguously allows set-off of the at-fault insurer’s payment against the UIM declarations limit | Declarations list $250,000 UIM limit and general references state declarations set limits, so policy promises up-to-$250,000 coverage | UIM endorsement expressly says declarations’ limit is "for reference only" and disclaims any duty to pay the full amount; set-off language plainly limits payout | The policy is unambiguous: Owners may set off the at-fault insurer’s payment; summary judgment for Craigs reversed and case remanded to implement set-off |
| Whether the declarations page alone creates an enforceable promise to pay the full listed limit | Declarations page and cover statements led an ordinary purchaser to expect $250,000 coverage | Declarations are introductory and subject to the policy body; coverage scope is determined by the whole policy, including endorsement language | Declarations are not a standalone promise; the UIM endorsement defines limits and controls |
| Whether internal policy language creates ambiguity (one provision promising limits and another defeating them) | The policy contains provisions (e.g., "Other Insurance") suggesting Owners’ coverage is excess, implying full declared limits should apply | The UIM endorsement’s Limit of Liability and its own Other Insurance clause clarify that set-off governs UIM limits; no internal contradiction exists when read as a whole | No ambiguity: unlike prior cases where both an express promise to pay declarations limit and contradictory set-off appeared, here the endorsement expressly prevents paying the full declarations amount |
| Proper interpretive approach: isolated reading of declarations vs. whole-policy reading | Insureds contend an ordinary buyer would rely on declarations and cover-sheet summaries | Insurer urges whole-policy reading; policy language directs reader to endorsement for actual limit definition | Court enforces whole-policy reading; ambiguous constructions favor insured only if true ambiguity exists, which it did not here |
Key Cases Cited
- Seeck v. Geico Gen. Ins. Co., 212 S.W.3d 129 (Mo. banc) (summary-judgment and policy-interpretation standards)
- Ritchie v. Allied Prop. & Cas. Ins. Co., 307 S.W.3d 132 (Mo. banc) (distinguishes enforceable set-off clause formulations; ambiguity arises when policy both promises declarations limit and precludes paying it)
- Jones v. Mid-Century Ins. Co., 287 S.W.3d 687 (Mo. banc) (limits set-off use and explains double-recovery concerns; identifies when inconsistencies create ambiguity)
- Manner v. Schiermeier, 393 S.W.3d 58 (Mo. banc) (UIM interpretation principles; distinctions on set-off wording)
- Dutton v. Am. Family Mut. Ins. Co., 454 S.W.3d 319 (Mo. banc) (policies must be read as a whole; declarations are introductory)
- Floyd-Tunnell v. Shelter Mut. Ins. Co., 439 S.W.3d 215 (Mo. banc) (declarations do not grant coverage; body of policy controls)
- Peters v. Farmers Ins. Co., 726 S.W.2d 749 (Mo. banc) (declarations are introductory and subject to policy body)